Put credit spread calculator

A put credit spread sells one put and buys a cheaper put at a lower strike, same expiration. The net credit is what you collect, and the long put caps the loss. The most the spread can lose is the distance between the strikes minus the credit, per share; that × 100 is the capital one spread ties up, far less than a cash-secured put on the same stock. In exchange, the most it can make is the credit.

A defined-risk put credit spread: sell one strike, buy a lower one. Enter your own assumptions.

Prices use Black-Scholes at your IV. Probabilities and the expected value use a lognormal model at your HV. Per share; no dividends, fees or early assignment.

Solving IV from a premium you saw, the model-versus-history fat-tail chart and three seller decision tools are in the Thetify app.

Coming soon to iPhone and Android. The app is in final testing.

Type the stock price, the short (higher) strike, the long (lower) strike, the days to expiration and the two volatilities. The calculator shows the credit, the maximum profit and loss per share, the capital per contract, the breakeven, the short strike’s delta and the probabilities under a lognormal model. Every reading is for the inputs you typed; nothing is filled in from the market.

Defined risk changes the size of a bad outcome, not the odds of one. The probability readings use the short strike, because that is where the spread starts to lose, and the breakeven sits below it by the credit. Moving the strikes apart raises both the credit and the capital per contract, and the expected value moves with them; try a few widths and watch the per-contract line.

Terms used here

Vertical spread: Two options of the same type and expiration at different strikes, one sold and one bought.
Net credit: Cash that arrives when a multi-leg order is opened: premium taken in minus premium paid out.
Max loss: The worst outcome the position can produce under the contract terms, before fees.
Capital in use: The cash the position ties up: strike × 100 for a cash-secured put, max loss × 100 for a defined-risk spread.
Spread width: The distance between the two strikes of a vertical spread.
Breakeven: The stock price at expiration where the position comes out flat: strike minus premium for a short put.
Probability of profit (POP): The modelled chance the position is above water at expiration, under the scenario’s own assumptions.

Where the course teaches it

All three strategies on one page: the options calculator · How the numbers are made